Arab News: Saudi Arabian Mining Co., known as Ma’aden, has signed a non-binding agreement with Aluminium Bahrain B.S.C., or Alba, to potentially create a global aluminum producer.
The agreement, dated Sept. 16, outlines plans to merge Ma’aden’s aluminum operations with Alba’s, forming a force in the global aluminum market.
The deal aims to leverage over 75 years of combined operational and financial expertise to enhance their competitive edge on the global stage, according to a press release.
Under the terms of the agreement, Ma’aden will transfer the entire share capital of Ma’aden Aluminum Co. and Ma’aden Bauxite and Alumina Co. to Alba, including the rights to market and sell products from Ma’aden Aluminum Co.
In exchange, Ma’aden will acquire newly issued shares in Alba. The specifics regarding the number of shares and Ma’aden’s ownership stake in Alba will be determined at a later date, as noted in a bourse filing.
This announcement comes on the heels of a deal made just a day earlier, in which US industrial giant Alcoa Corp. agreed to sell its stakes in Ma’aden Aluminum Co. and Ma’aden Bauxite and Alumina Co. to Ma’aden.
In this transaction, Alcoa will receive $150 million in cash and newly issued shares representing approximately 2.21 percent of Ma’aden’s share capital after the deal is completed.
The agreement with Alba also includes the possibility of a cross-listing on the Saudi Stock Exchange, pending further negotiations. The deal is effective immediately and will remain valid until Dec. 31.
It aligns with Ma’aden’s growth and sustainability strategy, aiming to strengthen its presence in Saudi Arabia and the broader Middle East region.
“Harnessing the combined scale and expertise of both businesses to forge a new global champion will not only advance Ma’aden’s ambitions for aluminum but also significantly boost the economic ties between Bahrain and Saudi Arabia,” Ma’aden CEO Bob Wilt said.
“By bringing together two of the region’s most experienced players in the sector, we are setting the stage for stronger economic growth, enhanced job creation, and increased aluminum production capacity. This partnership will elevate our competitive edge on a global scale,” he added.
Echoing Wilt’s sentiments, Alba Chairman Khalid Al-Rumaihi said this partnership will cement the company’s position as the largest regional aluminum producer.
“Our partnership will not only deepen the strong ties between Bahrain and Saudi Arabia but also contribute to Bahrain’s economic diversification and job creation. This is a compelling proposition and an exciting moment for Alba, Ma’aden, and our respective stakeholders, and we look forward to sharing further updates in due course,” Al-Rumaihi said.
The financial impact of the transaction will be assessed following a comprehensive due diligence process.
Completion of the deal is not guaranteed and depends on the satisfactory conclusion of financial, tax, legal, technical, and commercial evaluations, as well as obtaining necessary regulatory and corporate approvals.
Ma’aden has engaged Merrill Lynch Kingdom of Saudi Arabia as its financial adviser and AS&H Clifford Chance as its legal adviser. Alba has appointed Moelis & Co. UK LLP as its financial adviser.
This development comes as Ma’aden reports strong financial performance, with a net profit of SR2 billion ($532 million) for the first half of the year, marking a 160 percent increase compared to the same period in 2023.
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